CCP issues first decision on NHS procurement appeal

The Cooperation and Competition Panel (CCP) has issued its first decision on a procurement appeal, finding in a case involving NHS North of Tyne that there was no breach of the relevant principles and rules.

The CCP concluded that the decisions taken by the commissioner of the services – in this case specialist orthodontic services – fell within the range of reasonable decisions that it could have taken.

The findings will be submitted as advice to the Secretary of State for Health, who will decide whether or not to accept the CCP’s findings and will make the final decision. The panel nevertheless made some significant comments about procurement processes and dispute resolution procedures.

The case involved a procurement by NHS North of Tyne, which is a management body for Newcastle Primary Care Trust, North Tyneside Primary Care Trust and Northumberland Care Trust. The exercise was carried out by NHS Procurement North East on its behalf.

One of the bidders, a Dr Hobson, subsequently alleged that there had been breaches of principles 1 and 3 of the Principles and Rules for Cooperation and Competition.

These state that commissioners should commission services from those best placed to meet the needs of patients and populations (Principle 1), and commissioning and procurement should be transparent and non-discriminatory (Principle 3). Commissioners also have an obligation to comply with the PCT Procurement Guide, under Principle 3, Rule 1.

Dr Hobson made a series of allegations, ranging from a lack of transparency at the pre-qualification, invitation to tender and post-award stages to the procurement process to actual or apparent bias of a member of the evaluation panel.

The CCP hears appeals from decisions from commissioners that have progressed through the formal dispute resolution panels of the commissioner – typically the PCT – and the strategic health authority.

The panel said none of Dr Hobson’s allegations were proven sufficiently to show a breach of the principles and rules. In particular it concluded that no members of the evaluation panel were biased and Dr Hobson’s evidence for apparent bias was “slender”.

But the CCP commented on how bad procurement can effectively be challenged via the courts or via the PCT/SHA/CCP route.

It suggested: “To safeguard an effective PCT/SHA/CCP process it is important that where there is a challenge under this route, commissioners make appropriate arrangements to ensure that all options, including re-running the procurement process, remain open.

“Commissioners should consider how this can best be achieved. Options include granting a temporary extension to current service provision, temporarily increasing capacity elsewhere in the system, entering into short-term contracts with the winning bidder, or ensuring that there are appropriate termination mechanisms in the contract with the winning bidder.

“The CCP’s Procurement Guidelines now clarify this point by stating that it is good practice to allow a standstill period so that, where possible, all options remain open in the event that the dispute is upheld.”

The panel also said:

• The Office of Government Commerce’s standardised PQQ indicates it is good practice for questions and answers to be shared with all potential suppliers. In this case there was no formal process for questions to be asked and answers to be shared with all relevant potential providers or to provide a pre-PQQ briefing. The CCP did find that some of the questions and answers were “arguably material”. However, despite the absence of a formal process, potential bidders were not precluded from asking questions and an adequate number of bidders – including Dr Hobson – went through to the next stage.
• It would be good practice to clarify in tender documentation that cross references should be provided. That said, “bidders could be expected to include cross references to relevant information as a matter of common sense”
• It was not usual practice, or helpful for the parties, to be required to submit a joint paper to PCT or SHA dispute resolution panels “as this may result in one of the parties feeling unable to say exactly what it wants to or being influenced by the other, in turn resulting in a process that may be less effective”
• In the interests of transparency and good administration, it is desirable for decisions to be appropriately reasoned.

To read the ruling full, click here.